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Google Bets Big on Hardware With HTC Buy


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Photo Courtesy: Flickr

Google is biting off a big piece of device manufacturer HTC for $1.1 billion to expand its efforts to build phones, speakers and other gadgets equipped with its arsenal of digital services.

The deal announced Thursday underscores how serious Google is becoming about designing its own family of devices to compete against Apple and Amazon in a high-stakes battle to become the technological hub of people’s lives.

Over the past decade, Google had focused on giving away its Android operating system to an array of device makers, including Taiwan’s HTC, to ensure people would keep using its ubiquitous search engine, email, maps, YouTube video service and other software on smartphones and other pieces of hardware.

But that changed last year when Google stamped its brand on a smartphone and internet-connected speaker. HTC manufactured the Pixel phones that Google designed last year, perhaps paving the way for this deal to unfold.

Although Android powers about four out of every five smartphones and other mobile devices in the world, the software can be altered in ways that result in Google’s services being de-emphasized or left out completely from the pre-installed set of apps.

That fragmentation threatens to undercut Google’s ability to increase the ad sales that bring in most of the revenue to its corporate parent, Alphabet Inc., as people spend more and more time on smartphones and other devices instead of personal computers.

Apple’s iPhone and other hardware products are also particularly popular among affluent consumers prized by advertisers, giving Google another incentive to develop its own high-priced phone as a mobile platform for its products and ads.

Google also wants to build more internet-connected devices designed primarily for home usage, such as its voice-controlled speaker that’s trying to catch up with Amazon’s Echo. The Home speaker includes a digital concierge, called Google Assistant, that answers questions and helps manage people’s lives, much like the Alexa in Amazon’s Echo.

The purchase is a gamble on several fronts for Google and Alphabet.

Google’s previous forays into hardware haven’t panned out to be big winners so far. It paid $12.5 billion for smartphone maker Motorola Mobility five years ago only to sell it to Lenovo Group for less than $3 billion after struggling to make a dent in the market. And in 2014, Google paid more than $3 billion for home device maker Nest Labs, which is still struggling to make money under Alphabet’s ownership.

Expanding into hardware also threatens to alienate Samsung Electronics, Huawei and other device makers that Google relies on to distribute its Android software.

News Courtesy:VOA NEWS

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Tesla Starts Production of Solar Cells in Buffalo, New York


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Photo:Flickr

Tesla Inc. is starting production of the cells for its solar roof tiles at its factory in Buffalo, New York.

The company has already begun installing its solar roofs, which look like regular roofs but are made of glass tiles. But until now, it has been making them on a small scale near its vehicle factory in Fremont, California.

Tesla’s Chief Technical Officer, JB Straubel, says the company now has several hundred workers and machinery installed in its 1.2 million-square-foot factory in Buffalo.

“By the end of this year we will have the ramp-up of solar roof modules started in a substantial way,” Straubel told The Associated Press Thursday. “This is an interim milestone that we’re pretty proud of.”

The Buffalo plant was originally begun by Silevo, a solar panel startup, on the site of an old steel mill. Solar panel maker SolarCity Corp. bought Silevo in 2014. Then Tesla acquired SolarCity for around $2 billion late last year.

SolarCity was run by cousins of Tesla CEO Elon Musk, who sat on SolarCity’s board.

“This factory, and the opportunity to build solar modules and cells in the U.S., was part of why this project made sense,” Straubel said.

Tesla’s partner, Panasonic Corp., will make the photovoltaic cells, which look similar to computer chips. Tesla workers will combine the cells into modules that fit into the roof tiles. The tiles will eventually be made in Buffalo as well, along with more traditional solar panels. Panasonic is also working with Tesla at its Gigafactory battery plant in Nevada.

Straubel says Tesla eventually hopes to reach 2 gigawatts of cell production annually at the Buffalo plant. That’s higher than its initial target of 1 gigawatt by 2019. Straubel said Tesla has been working on making the factory more efficient.

One gigawatt is equivalent to the annual output of a large nuclear or coal-fired power plant, Straubel said, “so it’s like we’re eliminating one of those every single year.”

Straubel wouldn’t say how many customers have ordered solar roof tiles, but said demand is strong and it will take Tesla through the end of next year to meet its current orders. Both he and Musk have had the tiles installed on their roofs.

Tesla shares were up less than 1 percent to $355.65 in afternoon trading.

News Courtesy: VOA NEWS

Apple’s Next Big Leap Might Be Into Augmented Reality


Apple’s iPhone may be ready for its next big act — as a springboard into “augmented reality,” a technology that projects life-like images into real-world settings viewed through a screen.

If you’ve heard about AR at all, it’s most likely because you’ve encountered “Pokemon Go,” in which players wander around neighborhoods trying to capture monsters only they can see on their phones. AR is also making its way into education and some industrial applications, such as product assembly and warehouse inventory management.

Now Apple is hoping to transform the technology from a geeky sideshow into a mass-market phenomenon. It’s embedding AR-ready technology into its iPhones later this year, potentially setting the stage for a rush of new apps that blur the line between reality and digital representation in new and imaginative ways.

“This is one of those huge things that we’ll look back at and marvel on the start of it,” Apple CEO Tim Cook told analysts during a Tuesday conference call. Many analysts agree. “This is the most important platform that Apple has created since the app store in 2008,” said Jan Dawson of Jackdaw Research.

There’s just one catch: No one can yet point to a killer app for AR, at least beyond the year-old (and fading) fad of “Pokemon Go.” Instead, analysts argue more generally that AR creates enormous potential for new games, home-remodeling apps that let you visualize new furnishings and decor in an existing room, education, health care and more.

For the moment, though, we’re basically stuck with demos created by developers, including a “Star Wars”-like droid rolling past a dog that doesn’t realize it’s there; a digital replica of Houston on a table ; and a virtual tour of Vincent Van Gogh’s bedroom.

At Apple, the introduction of AR gets underway in September with the release of iOS 11, the next version of the operating system that powers hundreds of millions of iPhones and iPads around the world

Tucked away in that release is an AR toolkit intended to help software developers create new AR apps.

Those apps, however, won’t work on just any Apple device — only the iPhone 6S and later models, including the hotly anticipated next-generation iPhone that Apple will release this fall. The 2017 iPad and iPad Pro will run AR apps as well.

Apple isn’t the only company betting big on AR. Facebook founder Mark Zuckerberg talked up the technology at a company presentation in April, calling it a “really important technology that changes how we use our phones.” Apple rivals such as Google and Microsoft are also starting to deploy AR systems .

Apple has been looking for something to lessen its dependence on the iPhone since the 2011 death of its co-founder CEO Steve Jobs, the driving force behind the company’s innovation factory.

Cook thought he had come up with a revolutionary product when Apple began selling its smartwatch in 2015, but the Apple Watch remains a niche product.

For now, the iPhone remains Apple’s dominant product, accounting for 55 percent of Apple’s $45.4 billion in revenue during the three months ended in June. The total revenue represented a 7 percent increase from the same time last year. Apple earned $8.7 billion, up 12 percent from last year.

Tim Merel, managing director of technology consulting firm Digi-Capital, believes Apple’s entry into AR will catalyze the field. His firm expects AR to mushroom into an $83 billion market by 2021, up from $1.2 billion last year.

That estimate assumes that Apple and its rivals will expand beyond AR software to high-tech glasses and other devices, such as Microsoft’s HoloLens headset.

Craig Federighi, Senior Vice President Software Engineering speaks about “Augmented Reality” during Apple’s annual world wide developer conference (WWDC) in San Jose, California, June 5, 2017.

For now, though, nothing appears better suited for interacting with AR than the smartphone. Google already makes AR software called Tango that debuted on one Lenovo smartphone last year and will be part of another high-end device from Asus this month.

But it will be years before Tango phones are as widely used as iPhones, or for that matter, iPads. Most of those devices are expected to become AR-ready when the free iOS 11 update hits next month.

Nearly 90 percent of Apple devices powered by iOS typically install the new software version when it comes out. Assuming that pattern holds true this fall, that will bring AR to about 300 million Apple devices that are already in people’s hands.

If the new software wins over more AR fans as Apple hopes, analysts figure that Apple will begin building AR-specific devices, too.

One obvious possibility might be some kind of AR glasses tethered to the iPhone, which would allow people to observe digital reality without having to look “through” a phone. Once technology allows, a standalone headset could render the iPhone unnecessary, at least for many applications.

Such a device could ultimately supplant the iPhone, although that isn’t likely to happen for five to 10 years, even by the most optimistic estimates.

News Courtesy: VOA NEWS

 

Angelina Jolie ‘Upset’ Over Backlash to Cambodia Film Casting Process


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Photo Courtesy: Flickr

Angelina Jolie responded to growing backlash over the casting process for her latest film, saying she was “upset” that an improvised scene during auditions had been misconstrued as taking real money away from impoverished children.

In a Vanity Fair interview published last week about her film “First They Killed My Father,” Jolie described a game played by the casting directors with the young Cambodian children auditioning for the lead role of Loung Ung.

Jolie, a special envoy for the United Nations refugee agency, told Vanity Fair she looked for her lead star in orphanages, circuses and slum schools.

Jolie defends casting process

In the casting, a child was placed in front of money on a table, asked to think of what they needed it for and to snatch it away. Jolie would then pretend to catch them, and the child would have to lie about why they stole the money.

“I am upset that a pretend exercise in an improvisation, from an actual scene in the film, has been written about as if it was a real scenario,” Jolie, who directed the film, said in a statement on Sunday.

“The suggestion that real money was taken from a child during an audition is false and upsetting. I would be outraged myself if this had happened.”

Users on social media slammed Jolie’s casting game as cruel and exploiting impoverished children. Vanity Fair reporter Evgenia Peretz called the casting game “disturbing in its realism” in the profile, while Kayla Cobb at pop culture website Decider.com compared the game to a psychological thriller.

“Everyone should know better than to literally dangle money in front of impoverished children … no movie is worth psychologically traumatizing multiple children,” Cobb wrote.

Movie set during Khmer Rouge regime

“First They Killed My Father” is about the 1970s Khmer Rouge regime under which more than 1 million people died. It is due to be released globally and on Netflix in September.

Jolie said the young girl who won the part, Srey Moch, was chosen after “she became overwhelmed with emotion” when forced to give the money back, saying she needed the money to pay for her grandfather’s funeral.

“The children were not tricked or entrapped, as some have suggested,” Rithy Panh, a Cambodian producer on the film, said in a statement. “They understood very well that this was acting, and make believe.”

News Courtesy: VOA NEWS

 

Netflix Still Piling Up Viewers — and Big Programming Bills


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Netflix is pulling in new viewers and award nominations in droves, but the online video service still faces a long-term problem: Its acclaimed programming line-up is costing far more money than what subscribers pay for it.

That hasn’t been a big issue so far, thanks to investors’ willingness to accept scant profits in exchange for robust subscriber growth.

Netflix delivered on that front again Monday, announcing that it added 5.2 million subscribers in the second quarter covering April to June. That’s the largest increase ever during the period, which has always been the company’s slowest time of year.

Wall Street rewarded Netflix by driving up its stock by more than 10 percent to $178.30 in extended trading, putting the shares on track to hit a new high in Tuesday’s regular trading.

International Costs

The Los Gatos, California, company now has 104 million subscribers worldwide. For the first time in its history, most of those subscribers (slightly more than 52 million) are outside the U.S.

That milestone could further complicate Netflix’s cost issues, since the company will need to keep creating more shows that appeal to the unique interests of viewers in countries such as Japan, India and Indonesia.

“It is going to be imperative for them to have more locally produced content,” says CFRA Research analyst Tuna Amobi. “They can’t afford to pursue a ‘one-size-fits-all’ strategy.”

As part of its efforts to boost its profits, Netflix is becoming more aggressive about dumping shows that aren’t drawing enough viewers to justify their costs. In the second quarter, Netflix jettisoned both the high-concept science fiction show “Sense 8” and the musical drama “The Get Down.”

In a Monday letter to shareholders, Netflix CEO Reed Hastings made it clear that the company plans to exert more discipline in the future. “They are becoming more like any other Hollywood studio and paying more attention to the economics of their shows,” Amobi said.

Programming Coups

The subscriber growth further validates Netflix’s decision to expand into original programming five years ago. Two of its longest running shows —  “House of Cards” and “Orange Is The New Black” — recently launched their latest seasons.

Those two series, along with new hits like “Master of None” and “13 Reasons Why,” helped Netflix easily surpass the average 1.8 million subscribers it has added in the second quarter over the past five years.

This fall, new seasons of two other hits, “Stranger Things” and “The Crown,” are due. Those two series accounted for about a third of the 91 Emmy nominations that 27 different Netflix programs received last week — more than any other TV network except its role model, HBO, which landed 111 nominations.

Cash Burn

But the success hasn’t come cheaply.

Netflix is locked into contracts requiring it to pay more than $13 billion for programming during the next three years, a burden that has forced the company to borrow to pay its bills.

After burning through $1.7 billion in cash last year, Netflix expects that figure to rise to as much as $2.5 billion this year. It’s continuing to invest in more original programming amid increasing competition from the likes of Amazon, Hulu and YouTube.

Netflix expects to be spending more money than it brings in for several more years. It posted a more detailed explanation about its negative cash flow to give investors a better grasp of its programming expenses.

The company is still profitable under corporate accounting rules, although its earnings remain puny by Wall Street standards. It earned $66 million on revenue of $2.8 billion in revenue during its latest quarter.

Funding international operations remains Netflix’s biggest financial drag, although the overseas losses are narrowing. The company now expects its international operation to produce a small operating profit for the full year.

Netflix also could make more money by raising its prices closer to the $15 per month that HBO charges for its streaming service, but the company has said no increases are planned in the near future. Netflix’s U.S. rates currently range from $8 to $12 per month.

News Courtesy: VOA NEWS

After Mosul: The IS Family Dilemma


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Outskarts of Mosul Photo Courtesy: Wikimedia Commons

“Sir, my father was an Islamic State militant, but he divorced my mother in 2013,” said Jassem Mohammad, 21, pulling out his identification card and presenting it to the camp manager.  “He now has two other wives.”

In a tiny patch of shade on the edge of a blistering desert camp outside of Mosul, the manager listened as Mohammad made his case.  He wanted to leave the camp and go back to college.  He had good scores, he said, and was never involved with IS.

Militant rule in Mosul has collapsed and IS fighters here are dead, fled, arrested or in hiding.  But as their relatives try to re-integrate into society, Iraqi authorities face impossible questions with only bad answers.

If someone loved or even tolerated an IS militant, is that person guilty?  How do the relatives of the perpetrators make peace with the relatives of the victims?
Medics at this collection point for fleeing families treat a baby for malnutrition, which they say is widespread among children in Mosul, Iraq, on July 12, 2017

Officially in Iraq, the answer to the first question is “no,” especially when speaking of small children.  Women and children fleeing areas IS occupied are checked for bombs, and when cleared, they are considered civilians.

Unofficially, families of militants are shunned, feared and often separated from the “regular” people, all traumatized by violence and extreme poverty under IS.  Many IS families now live in camps, like Mohammad, where they are not quite sure if they are being detained or protected.  And both, in fact, are true.

“We’d need to see the divorce papers,” the camp manager explained to Mohammad.  If Mohammad offered evidence that his father was not in his life during IS rule in Mosul, it might be possible for him to go back to school.

“I want to study and do humanitarian work,” Mohammad continued, pleading his case to a nearby journalist.

Appearances

As Mohammad and the reporter chatted, the camp manager looked nonplused and strolled away.  A security officer, in contrast, was visibly annoyed and abruptly ended the conversation.

“You cannot talk to him without official permission,” he said, ushering all journalists out of the camp.  Other Iraqi officers said they worry that news about camps set aside for IS families will make them look like monsters, locking up women and children.

“What can we do as the Iraqi government?” said a member of a community police force who didn’t want to be named because he was not authorized to speak to the media.  “We are exposed to danger.  They are families, but we can’t loose them without rehabilitation.”

Distrust on all sides

Inside the city, at the base of a long-dormant Ferris wheel, a short row of tents served as a collection point for families fleeing Mosul in the final days of battle.

Women and children filed into the tents, some collapsing where they sat.  Medics treated injuries and food and water alleviated some of the most pressing pains.  Many of the people had been hiding in basements for weeks, after months of water shortages.  The smell of unwashed bodies was pungent and the heat in the stagnant tents was overwhelming.

“We were imprisoned,” said Khalifa, 46, a mother of three.  Unlike the rest of the women in the tent, she wore no veil and her curly hair was tousled.  “We tried to run away and militants locked us in a basement.  For the past three days we’ve had no food or water.”

“Once they brought us food in the basement,” adds Hoda, 25, her daughter.  “He came down wearing a suicide vest.”

Their story echoed tales from families all over Mosul and, even if their husbands or fathers were IS fighters, it could still be true.  However, local authorities worried they were lying, casting themselves as victims, rather than somehow complicit.
In Old Mosul, dead IS militants are scattered in houses and on the streets and the smell is overwhelming in 45-plus degree Celsius weather on July 13, 2017 in Mosul.

One man peppered Hoda with questions about the neighborhood she said she was from.  IS militants in Mosul were often not stationed near their original homes.   Hoda failed to identify the most famous church, mosque and graveyard in the area.

“See, they are an IS family,” the man said.  “They are lying.”

Another woman, Fatima, a mother of eight, said for relatives of IS omitting certain truths is a matter of survival.  Sitting with an intelligence official, Fatima admitted she had two brothers that fought with IS.  Both, she said, are now dead and she never supported their decision to join IS.

But when the officer walked away, she said at least one of her brothers is alive and now in Tal Afar, an Iraqi city still held by IS.

“We are afraid to tell them when we talk to family members who are with IS,” she whispered.  “We don’t want to be blamed for what they did.”

News Courtesy: VOA NEWS

Afghanistan to Block Terror, Extremist Groups’ Online Activities


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Picture Courtesy: Wikimedia Commons

Afghanistan says it will begin blocking all online activity and websites linked to terror groups or extremists later this week, under terms of a cybercrime bill the government signed into law last month.

The Ministry of Telecommunications and Information Technology said it is gathering a list of websites linked to terror groups or their supporters, based on information from the National Intelligence Directorate (NDS) and the Ministry of Information and Culture.

Najib Nangyal, a ministry spokesperson, said website-blocking will begin this Saturday, as authorized by the National Cyber Security Strategy of Afghanistan (NCSA) and the new Cyber Crimes Act.

Voice of concern

A dissenting voice has been raised by the nongovernmental organization Nai, Supporting Open Media in Afghanistan. The group opposes the new cybercrime law on the grounds that it limits freedom of expression and access to information.

Telecommunications ministry spokesperson Nangyal denied those charges in a statement to VOA’s Ashna radio.

The new criminal law that President Ashraf Ghani signed last Friday contains 27 articles related to prohibited cyberactivities. It is the first comprehensive attempt to catalog cybercrimes and violations in 15 years, a period during which online activity in the country expanded greatly.

Internet services for 6 million

Although parts of Afghanistan are still ravaged by war, the country of 32 million people now has internet services capable of serving 6 million people. A lack of cyber regulations, meanwhile, has allowed terrorists and extremist groups to continue working online, the government said.

Media rights group Nai, established in 2005 with the support of the Internews network, is currently supported by funds from USAID, the U.S. international development agency. Mojib Khalwatgar, head of Nai, said his agency is concerned about vague and undefined terms used in much of the law, and in particular on its potential effect upon journalists.

Nai’s statement of “general beliefs” about the new law says it appears to potentially criminalize any exchange of data or software from one computer to another, and that any normal activity by an organization’s information technology staff could be construed to be a criminal act.

Mohammad Ahmadi contributed to this report

Text Courtesy: VOA NEWS

Featured Image Courtesy: Wikimedia Commons

Strange Sea Creatures Near Alaska Baffle Scientists


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Photo Courtsesy: The Juneau Empire , AlasKa, USA

Strange sea creatures that resemble large pink thimbles are showing up on the coast of southeast Alaska for the first time after making their way north along the West Coast for the last few years.

Scientists say the creatures are pyrosomes, which are tropical, filter-feeding spineless creatures usually found along the equator. They appear to be one long pink tube, but in reality, they’re thousands of multicelled creatures mushed together, generally about 6 inches (15 centimeters) long.

Pyrosomes have been working their way north, Ric Brodeur, a researcher with the U.S. National Oceanic and Atmospheric Administration, told the Associated Press on Monday.

Brodeur, who is based at the agency’s Northwest Fisheries Science Center in Newport, Oregon, said pyrosomes were first seen on the Oregon coast in 2014 and every year since. More recently, the animals have made their way up farther north on the Washington state coast, Canada’s British Columbia and Alaska.

Jim Murphy, a biologist with the U.S. National Oceanic and Atmospheric Administration, said pyrosomes spotted near Alaska this year marked the first documented presence of the animals that far north, and their appearance is cause for concern.

“It means that we are clearly seeing really big changes in the marine ecosystem,” he told The Juneau Empire.

Researchers have speculated that the bloom is tied to warmer ocean temperatures in the Pacific Ocean in recent years. But temperatures have nearly cooled back to normal this year, Murphy said, and these pyrosomes started showed up in the middle of winter.

Leon Shaul, a biologist with Fish and Game, has been tracking the appearance of pyrosomes in southeast Alaska. He said he’s “emailed the whole world” about the issue, but hasn’t heard much back.

Brodeur told the AP that it’s also unusual how close to shore the pyrosomes have come, although they are now being found farther offshore again.

He said the creatures have a low nutritional value, and that raises concerns on how they will affect the fish that eat them.

“They’re not the greatest food for the animals out there, compared to the things they normally have,” he said.

Pyrosomes aren’t harmful to humans, but they have puzzled those who’ve encountered them.

Angler Don Jeske was fishing for king salmon in February when he said he found himself surrounded by “millions” of the tube-shaped creatures and he’d never seen anything like it in his 50 years of trolling around Sitka, a fishing town about 90 miles southwest of Juneau.

“They were all over out there, they were everywhere. … I would say millions, not hundreds of thousands,” he said. “This is a weird organism, man.”

Text Courtesy: VOA NEWS

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Facebook Drone Could One Day Provide Global Internet Access


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Photo Courtesy: Flash Alexander

A solar-powered drone backed by Facebook that could one day provide worldwide internet access has quietly completed a test flight in Arizona after an earlier attempt ended with a crash landing.

Facebook founder Mark Zuckerberg’s long-term plan for the drone, called Aquila, is to have it and others provide internet access to 4 billion people around the world who are currently in the dark.

“When Aquila is ready, it will be a fleet of solar-powered planes that will beam internet connectivity across the world,” he wrote on Facebook.

The drone’s second flight was completed in May at Yuma Proving Ground, The Yuma Sun reported.

The drone flew with more sensors, new spoilers and a horizontal propeller stopping system to help it better land after the crash in December. It was in the air for an hour and 46 minutes and elevated 3,000 feet (910 meters).

The drone flew with the engineering team watching a live stream from a helicopter chasing the drone, said Martin Luis Gomez, Facebook’s director of aeronautical platforms.

The team was thrilled with the outcome, Gomez said.

“The improvements we implemented based on Aquila’s performance during its first test flight made a significant difference in this flight,” he said.

The drone weighs about 1,000 pounds (450 kilograms) and has a longer wingspan than a Boeing 747.

The drone runs mostly on autopilot, but there are manned ground crews to manage certain maneuvers.

“We successfully gathered a lot of data to help us optimize Aquila’s efficiency,” Zuckerberg said. “No one has ever built an unmanned airplane,”

Text Courtesy: VOA NEWS

India Launches New Economic Era With Sales Tax Reform


India early on Saturday introduced its biggest tax reform in the 70 years since independence from British colonial rule.

The Goods and Services Tax (GST) replaces more than a dozen federal and state levies and unifying a $2 trillion economy and 1.3 billion people into one of the world’s biggest common markets.

The measure is expected to make it easier to do business by simplifying the tax structure and ensuring greater compliance, boosting Prime Minister Narendra Modi’s economic credentials before a planned re-election bid in 2019.

At a midnight ceremony in parliament’s central hall Modi and President Pranab Mukherjee together launched the new tax by pressing a button.

“With GST, the dream of ‘One India, Great India’ will come true,” Modi said.

For the first midnight ceremony in the central hall in two decades, Modi was joined by his cabinet colleagues, India’s central bank chief, a former prime minister and major company executives including Ratan Tata.

Indian Prime Minister Narendra Modi attends an event a day ahead of the implementation of the nationwide Goods and Services Tax (GST) in Ahmadabad, India, June 30, 2017.

The launch, however, was boycotted by several opposition parties including the Congress Party, which first proposed the tax reform before it fell from power three years ago.

Former Prime Minister Manmohan Singh – the architect of India’s economic reforms – also gave it a miss.

Complex Structure

It has taken 14 years for the new sales tax to come into being. But horse trading to get recalcitrant Indian states on board has left Asia’s third-largest economy with a complex tax structure.

In contrast to simpler sales taxes in other countries, India’s GST has four rates and numerous exemptions.

The official schedule of rates runs to 213 pages and has undergone repeated changes, some taking place as late as on Friday evening.

Many businesses are nervous about how the changes will unfold, with smaller ones saying they will get hit by higher tax rates.

Adding to the complexity, businesses with pan-India operations face filing over 1,000 digital returns a year.

While higher tax rates for services and non-food items are expected to fuel price pressures, compliance is feared to be a major challenge in a country where many entrepreneurs are not computer literate and rely on handwritten ledgers.

“We have jumped into a river but don’t know its depth,” said A. Subba Rao, an executive director at power firm CLP India.

‘One Tax, One Market, One Nation’

Poor implementation would deal a blow to an economy that is still recovering from Modi’s decision late last year to outlaw 86 percent of the currency in circulation.

In a bid to mitigate the impact on the farm sector, the GST rates for tractors and fertilizer were slashed on Friday to 18 percent and 5 percent, respectively.

HSBC estimates the reform, despite its flaws, could add 0.4 percentage points to economic growth.

An end of tax arbitrage under the GST is estimated to save companies $14 billion in reduced logistics costs and efficiency gains.

As the GST is a value added tax, firms will have an incentive to comply in order to avail credit for taxes already paid. This should widen the tax net, shoring up public finances.

“The old India was economically fragmented,” Finance Minister Arun Jaitley said. “The new India will create one tax, one market for one nation.”

Text Courtesy: VOA NEWS

Pictures Courtesy: Wikimedia Commons

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